VCG has operations spanning thirteen countries and a rights library of nearly eighty VR titles, positioning it to rival the scale of leading American VR companies on the international stage. To date, the company has produced and co-produced more than 150 VR projects. The three respective entities have a long track record and clients in over 40 countries, including BMW, Mercedes-Benz, Disney, Huawei, Unicef, Sky, Netflix, NBC Universal, Samsung, LG Electronics, Sony and Deutsche Telekom.

The merger allows VCG to scale faster and serve larger clients with a regional focus on Europe and Asia-Pacific. “VCG is as an international leader in VR,” said Torsten Hoffmann, VCG co-founder and CEO, who has licensed 3D content since 2011. “Building our own IP is core to our business model.” The business, already profitable, will seek Round-A investment in early 2017 and intends to add more partners later this year.

Just three weeks ago, the Lumière™ award for Best European VR Campaign was awarded for VCG’s BMWi and Samsung 360° Experience. “The project included both 3D 360 live-action camera capture and augmented reality (AR),” said Berlin-based Sönke Kirchhof, VCG co-founder and head of production. VCG’s French team worked on Les Poissons Volants’ 3D 360 CGI project, Temptation of St.Anthony, which picked up the second Lumière™ award. This short film immerses the viewer into a famous medieval painting by H. Bosch.

In addition to distributing premium VR titles including Titans of Space and Tomorrow VR, VCG is currently developing a wide breadth of high-level projects, including museum installations, co-productions in Australia, South Africa, Hong Kong and Germany and a room-scale VR experience. “We partner with governments, companies and creatives all over the world and are not limited to one camera system or distribution platform,” added Gallien Chanalet-Quercy, VCG co-founder and head of content.

The three founders are available for interviews via Info@VirtualContentGroup.com.

About Virtual Content Group (expanded)

Virtual Content Group (VCG) is a leading global VR content company offering end-to-end production, post-production and distribution services. With a background in stereoscopy and 3D, operations spanning thirteen countries and over 50 clients worldwide, VCG is an international powerhouse with a focus on high-end branded content and award-winning factual content. The company has delivered more than one hundred 360-degree videos and virtual reality projects and owns distribution rights to a growing library of over eighty 3rd-party productions. VCG was founded in 2016 as three established companies from Australia, Germany and France completed a merger:

Cow Prod, based in Paris, has been at the cutting-edge of the production and post-production industry in France since 2000. A 3D content creator since 2004, CEO Gallien Chanalet-Quercy is a member of the board of Advanced Imaging Society Europe as well as a founding member of the 3D Guild. Cow Prod’s VR spinoff was founded based on several client requests for 360 degree production and post-production services and is now integrated into VCG.

INVR.SPACE from Berlin became one of the most experienced German VR production companies by developing interactive VR campaigns for very large corporate clients. CEO Sönke Kirchhof first built 360 degree camera rigs in 2008 and is a board member of Fraunhofer Heinrich Hertz Institute’s prestigious German technology cluster “3IT”.

With clients in 40 countries, Australia’s 3D Content Hub is a niche content distributor that has helped filmmakers, independent studios and content producers generate revenues from 3D, UHD, and HDR content. Founder Torsten Hoffmann is considered an international expert in monetizing content in leading-edge formats, now including 360 video content.

The three companies have merged their businesses and re-branded as Virtual Content Group to scale faster and serve larger clients and investors. The firm has a growing base of clients in Europe, Asia and the Middle East and is currently expanding into other territories. Learn more at www.VirtualContentGroup.com and on Twitter @VirtualContentG.

GCQ: I come, like the three of us, from a strong 3D background and have always been interested in new ways to tell stories. When the first 360 photography gear was released, we immediately tried to use it for storytelling and built our first rigs.

SK: With my background as a producer/CEO, I always focused on new ways of storytelling and formats. For example, I started one of the first internet TV Stations in Germany back in 2005 – just to be able to distribute art projects that I was interested in. In 2006, I founded Real Life Film International, focusing on stereoscopic 3D, to tell stories in more immersive ways than in flat 2D. Shortly after that in early 2008, I was part in a research consortium on immersive storytelling; we also shot the first 180° degree project with the first prototype of Fraunhofer HHI´s Omnicam. Over time, there were more projects in 360° for Dome Projections – and since 2014, we have produced and collaborated on over two hundred projects in 360°.

TH: Licensing content is a competitive and crowded business. I stumbled into stereoscopic 3D ‘by accident’ and 3D Content Hub became one of the leading distributors in this niche – which quickly disappeared. What 3D promised back then, VR actually delivers now. This became clear to me as soon as I saw the first few 360 clips on GearVR. VR will take a few more technology iterations to really take off – yet the first few headsets and experiences are already quite impressive.

What is your proudest professional accomplishment to date?

SK: My favorite moment was when Disney decided that they will not shoot in Los Angeles or with the largest German studio, but with us a relatively small and unknown company. We had been involved in the development of the camera system (which was awarded by the International 3D Society shortly afterwards) and Disney was convinced that we understood the creative aspects of working with it as well as the technical details.

GCQ: a) the premiere of my first feature film as executive producer in London, b) accepting the Lumiere Award in LA alongside Jean-Pierre Jeunet for Best 3D Commercial of the Year for the World of Warcraft commercial, and c) the recent Lumiere award for Temptation of St. Anthony VR for Arte Creative.

TH: a) figured out many ways to monetise 3D content and paid out about $3 million in license revenues to independent filmmakers, small production firms and freelancers b) built a network of hundreds of content creators and clients all over the world and finally c) wrote, crowdfunded, directed and produced my first documentary about the controversial technology Bitcoin and won 4 international awards for it.

Fellow Filmmakers. I haven’t written much on this blog for a while. This case study is about what I have been up to for the past 18 months and my learnings about crowdfunding documentaries and self-distribution in the process. Here is all the data in great detail. This article also explains how my film ended up being the most pirated documentary on the Internet.

The Idea:
– Experience of working with filmmakers and factual content for about 5 years.
– Indirectly or directly involved with hundreds of documentaries.
– I am passionate about Technology and have a strong interest in Finance (I wrote a paper about alternative currencies during my MBA program).
– When Bitcoin came along it seemed like a good topic for a documentary. It’s too complex to explain in an article or a 3 minute conversation.
– Controversial topic. Some hailing it as “the biggest thing since the Internet” while others claim that it’s “a Ponzi scheme”.
– Very passionate community. Clearly defined target audience: 90% Male. Age 20-35. Tech savvy.
– Additional to myself, the team included Michael Watchulonis (an award-winning filmmaker and director who helped me with all technical aspects as well as with the writing and all of the editing) and an industry expert who is very well connected in the Bitcoin and FinTech space.
– Chose a provocative title which raises questions/curiosity: “Bitcoin: The End Of Money As We Know It”

Crowdfunding Campaign:
– Produced a number of interviews and a “punchy” trailer prior to the campaign
– Chose Kickstarter. Click here to see the campaign.
– Campaigning is a full-time job for 6-8 weeks.
– Understood that crowdfunding is less about the actual money but about gathering a community and a base of loyal fans.
– Asked for a relatively small amount of $10,000. Never intended to cover all production costs. – Reached the goal early and 174% in total. That’s about $15,500 after fees and commission.

– Most popular rewards were the lower tiers

– Mid-tier rewards included a clever giveaways like authentic 10 Trillion Dollar banknotes from Zimbabwe– The rest of the budget (approx. 70%) was self-funded– Campaigning was largely done via social media and within the existing Bitcoin community– Campaign success also functioned as ‘proof of concept’.

Documentary Production:
– Produced the film in standard High Definition. Recorded interviews in 6 cities on 3 continents.
– Licensed hundreds of clips for B-Roll (tracking down, licensing, obtaining, monitoring it would turn out to be a major time and cost factor). Used footage services and existing network of friends in the industry. Many Bitcoin users and companies provided useful footage for free.
– To save costs, we used royalty free music and kept custom animations limited
– Delivered film behind schedule and above initial budget (just like every first time filmmaker)
– Post-production milestones were submission dates for film festivals

Pre-Release Activities
– Crowdsourced the design of our poster/key art via 99Designs. 125 designs were submitted. See all variations here. Polled our fanbase for their favorite design and decided on this one:

– Mistake: not clearly communicating a definite launch date
– Built a strong presence on Reddit. 1,500 Upvotes and 500 comments
– Won three awards at festivals in Amsterdam and Las Vegas
– Handling film festivals via services such as withoutabox or filmfreeway is efficient but investment in time and money is high. We stopped after a few months.

– Best performing Transactional VOD platform is Vimeo where the social media statistics are very strong compared to almost any other film on their service

– Innovative download package as BitTorrent Bundle generated a lot of traffic but not many transactions
– Great results on small platform that offers pay-with-Bitcoin option
– Reddit was a strong traffic driver
– Interviews and appearances on manymany many radio shows and podcasts. Activated 20 promotion codes which (only) yielded 130 transactions (usually 20% off).
– Getting rated and reviewed on imdb is very difficult. Should have encouraged audience earlier. Score started around 9.0 and then made a sudden drop to 7.1 where it is now ‘locked’.

– Upon closer inspection, it is a few bad ratings that pull the weighted average down. The “mean” is still 8.0 and the “Median” 9.

– This is the rating after a few months.

I now understand why almost any film ends up in the 6-7 point range.

– Made the mistake of not launching on iTunes and Amazon at the same time (It takes much longer to onboard on these platforms). Launch date on iTunes (USA) in early August and Amazon Instant Video in mid August. Getting reviews in order to “kickstart” the algorithms there is difficult.

– Local screenings all over the world at community events (Sydney, Santiago de Chile), meetup groups, conferences (London, Amsterdam), and even in traditional movie theatres (Scandinavia, Israel). The free Sydney screening generated 120$ in donations. We are looking for people who want to organize more screenings now.
– Interestingly, more than 20 subtitled versions (Russian, Hindi, Mandarin, Spanish) have appeared on the Internet. Unauthorized but highly appreciated.

Piracy:
– This is a film about a peer-to-peer technology, so the fact that it would get pirated so much is not surprising
– Estimate: About 200,000 illegal (torrent) downloads, making it one of the most popular documentary among pirates in 2015. These are two google alerts from January (seven months after initial release).

– We have seen about 120,000 illegal video streams, mostly on YouTube. Take-down process takes several days. Some of the uploaders are ‘hiding’ the film under a different name which makes it very difficult to detect.
– It is impossible to estimate whether any of these illegal viewers (streamed or downloaded) would have paid for the film. There is some evidence from Hollywood blockbusters that there is little overlap and cannibalisation i.e. pirates do not hurt the legal distribution and might actually help it.
– We estimate that there are also numerous unauthorized public screenings of the film (see USA, Mexico and Indonesia below). I encourage free screenings as it increases the overall popularity of the film and it translates into more imdb ratings, reviews and maybe some legal downloads. However, most of these venues never contacted us in the first place.

Distribution results after 6 months

– Vimeo remains the best platform for us, but after the first weeks the revenue is only at a minimum base level. iTunes was only strong for the first two weeks. Amazon Instant Video is constant/slightly growing.
– On vimeo 15,000 trailer plays resulted in 1,000 transactions. 40% came from the USA. 8% from the UK, and 7% each from Germany and Australia
– On iTunes (USA) 47% of all transactions are rentals, 53% are purchases. 67% are HD transactions which are 1-2$ more expensive than SD
– Weekends are strongest on both vimeo and iTunes. Price promotions or coupon codes have little impact. Bitcoin press coverage in mainstream media (scandals, big investments, price swings) translate into more views.
– Ratio of about 300’000 pirated views to 2’000 paid transactions means that I monetize less than 1% of all views
– Small extra income with screening fees or bulk DVD orders
– 30 donations to our Bitcoin wallet address totalling about 250$– Some TV channels and film festivals have contacted us; I assume some of them due to the ‘popularity’ of the pirated versions– We are now starting to place the film for in-flight entertainment (business/finance documentaries perform well in this market) and are actively seeking international sales agents for television.

Conclusions:

– Using cheap sources of B-roll and other footage as well as royalty-free music is crucial unless you have tons of other people’s money to spend
– We need to deliver from idea to finished film much faster and at lower cost
– Narration based docs are less popular with the main buyers (broadcasters); we will consider stronger characters or ‘hosted’ stories in the future
– Self-distribution (B2C) is very difficult and time consuming even if your film is popular and ‘goes viral’; a coordinated big global launch is important (we missed an opportunity)
– We don’t have an indication whether (costly) other language versions would have helped with distribution
– You cannot fight piracy, don’t even try it. Instead, try to use it to your advantage
– Traditional B2B (licensing) distribution is still where most of the revenues are
– We are not convinced that the awards at smaller festivals helped us with distribution. However, we think it’s advisable to submit to festivals that match your core audience in order to gain “street cred” (e.g. we won an award at a Libertarian festival)
– For our next production we would chose a topic that has an equally enthusiastic following and community behind it; it is a good idea to cover topics that are about to become trends
– We will not self-fund another production again and instead rely on traditional funding sources (pre-sales, broadcasters, incentive programs) and substitute this with a crowdfunding campaign

Q1: Please tell us a bit more about yourself and your company. How did you get started with filmmaking?

As far back as I can remember, I always wanted to make films. I guess I couldn´t stop myself from trying to make my own. So I first started to storyboard them and then, when I was like eight years old, I laid my hands on my Mom´s friend´s video camera and shot my own star-wars film (with actual Star-Wars action figures) From that on, I´ve never really stopped making lousy films. Only they eventually got better! My company Lovetheframe is just another step on this very same road. I´m especially proud of a heartbreaking documentary I shot in Cuba called Knockoutkuba.

Q2: What was the response to your 4k film Cave of Wonders? Why did you decide to make a longer version now?

Poster Into the Cave of Wonders

The shortfilm was a great fun in terms of experimentation. Our aim was making a short doc so visually powerful that words would get in the way. Like the “no comment” section we used to watch on the News. You did not wholly understand them but you felt them even more because of that. Apparently we succeeded because it won many international awards and got great reviews and recognition. But I say apparently because by succeeding, we paradoxically built an audience that wanted to know and learn more about the Cave of Wonders. And so we had to face a new challenge: Make it longer and narrated without losing any visual power. I would like to believe that we did it again. Time will tell.

As distributor of 4k content we get frequently asked by producers whether upgrading their workflows to 3840 pixels makes financial sense. “It depends” is our reply. We have recently experienced the boom and bust cycle of stereoscopic 3D and many in our industry are left disappointed and disillusioned having lost considerable investments into a technology that ultimately failed to convince the consumer. Being cautious about the “next big thing” the TV manufacturers are throwing at the market seems to the prudent approach.

Al Caudullo wrote this detailed article about UHD production at low budgets with many great insights and details. “We were able to get 2.3 feet of slide distance with the simplicity of being tripod mounted” he writes and highly recommends other equipment, too: “The inevitable conclusion is that this camera is a game changer for the indie market”. Here is the link to the original Creative Cow article.